The Australian Prudential Regulation Authority (APRA) is finalising changes to six general insurance reporting standards that incorporate APRA’s earlier clarification of the treatment of reinsurance recoverables from the Australian Reinsurance Pool Corporation (ARPC).
The Australian Government announced its intention to establish a reinsurance pool covering the risk of property damage caused by cyclone and cyclone-related-flood damage In May of 2021.
In April this year, the APRA stated its intention to allow insurers to fully recognise the risk transfer provided by the reinsurance pool in recognition of the Australian Government guarantee of the ARPC and proposed consequential updates to the prudential framework.
On the 16th of June this year, the APRA proposed changes to six general insurance reporting standards that incorporate APRA’s clarification of the treatment of reinsurance recoverables from the ARPC.
APRA proposed that this change be made in the following reporting standards:
• Reporting Standard GRS 114.1 Assets by Counterparty Grade
• Reporting Standard GRS 114.1.G Assets by Counterparty Grade
• Reporting Standard GRS 114.3 Off-balance Sheet Business
• Reporting Standard GRS 114.3.G Off-balance Sheet Business
• Reporting Standard GRS 117.0 Asset Concentration Risk Charge
• Reporting Standard GRS 117.0.G Asset Concentration Risk Charge
No submissions were received in response to APRA’s consultation package, which closed on the 30th of June 2022.
The APRA has finalised the amendments and has incorporated them into the relevant reporting standards as proposed. The changes are set to take effect for reporting periods ending on or after the 1st of July 2022.
Quarterly data submissions for this period will be due by the 28th of October for Northern Territory, Victoria, Tasmania, and Western Australia; and by the 31st of October for New South Wales, the Australian Capital Territory, Queensland and South Australia.
